Ferry seeks U.S. line of credit

The ferry Nova Star slowly swings around in Yarmouth Harbour before heading back across the Gulf of Maine. (BRIAN MEDEL / Yarmouth Bureau)

The company operating the Yarmouth ferry is in talks with the governor of Maine’s office to secure a line of credit.

The Nova Scotia government recently advanced Nova Star Cruises $5 million because the state has yet to help the company secure a line of credit to be used for operating costs. The news was something of a surprise, given that Gov. Paul LePage wrote a letter to former premier Darrell Dexter pledging to help the company on that front.

Economic and Rural Development Minister Michel Samson said Thursday that he reminded LePage of that letter during a conversation about a month ago.

“My staff have followed up since that time with the governor’s office and we’ve been informed by the company that they are now having direct conversations between the governor’s office and a number of lending institutions in the States.”

Samson said there’s a different system at play in Maine, compared to Nova Scotia; the line of credit in Maine would have to be offered by a bank.

“The governor’s office would not be in a position to commit the state to that, so there’s a number of parties that are involved in the discussions,” said Samson. “We remain hopeful that there will be a positive conclusion to those discussions.”

The $5 million was not the only unexpected expense the province has faced with the file. The government loaned Nova Star $2 million this spring to satisfy an American regulation that was required so the company could advertise the service and sell tickets.

All of that money came from a $21-million pot that is supposed to be stretched over seven years. To date, about $19 million of that fund has been used, with the two most recent loans expected to be returned sometime this summer.

Samson said he’s not anticipating more funding requests from the company.

“Hopefully the weather is going to continue to improve and we’re going to see many users on the ferry, which, of course, is going to generate the revenues necessary for the ferry to be able to continue and to be able to meet its operating expenses.”

Company officials said in the lead-up to the service launch that their goal was 100,000 passengers between May and October. Early into the service the company made travel free for passengers younger than 18.

Despite weak travel numbers to this point, the company’s chief operating officer, Steve Durrell, said in an emailed statement that the goal remains unchanged.

“Our marketing efforts, focused on attracting visitors to Nova Scotia, and our newly deployed dynamic pricing strategy, featuring new rates and packages, are showing great returns, with the passenger booking exceeding 1,000 a day over the past week.”

Samson said the government has “done everything possible to be respectful of taxpayers’ dollars.” There have been surprises, but the minister said the government has reacted diligently in those cases.

“We fully understand that this is going to be a challenging year,” he said.

“I think the province has done everything it can to assist in this venture, but at this point in time we’re going to continue to work with Nova Star and certainly hope that it’s going to have a very successful season.”